Abstract: In Thailand, as in other developing countries, the focus was on the large industry first, since governments assumed that large enterprises could generate more employment. However, there has been a realization that the SMEs are the biggest group in the country and are significantly important to the process of social and economic development. This realization has prompted Thailand to institute mechanisms to support and protect SMEs consist of manufacturing, merchandising (wholesale & retail) and service businesses. Unfortunately, most of these SMEs lack capability in operational areas such as technology, management, marketing, and finance when compared to large enterprises. In order to adapt and survive SMEs need full and proper support from the government. To aid in their adaptation and survival, SMEs and government must develop their knowledge management framework to effectively harness their past and present experiences, and anticipate the future evolution of their commercial environment. In most countries, SMEs are the biggest source of export even in normal circumstances. Consequently, the state and SMEs have to focus and work hard to their ensure survival.